Finance Bill

Written evidence submitted by the Chartered Institute of Taxation (CIOT) (FB 10)

Finance Bill 2016 - Clauses 172-177 (Office of Tax Simplification)

1. The OTS was established in July 2010 to give independent advice to the government on simplifying the UK tax system. Its objective is to reduce tax compliance burdens on both businesses and individual taxpayers.

2. Notwithstanding the OTS’ efforts, the increasing quantity and complexity of legislation shows no signs of abating. By way of illustration [1] , the average number of pages of additional legislation in each year’s Finance Act(s), since 2010, is nearly 550, with a peak of 687 pages in Finance Act 2012. Finance (No. 2) Bill is 571 pages long.

3. The increased devolution of taxes to Scotland (e.g. Land and Buildings Transaction Tax), Wales and Northern Ireland, means that it is even more important for legislation to be simple and easy to understand.

4. We welcome measures to put the OTS on a statutory footing. To try to stem the ever increasing quantity and complexity of legislation, we recommend that the measures go further than proposed, including:

4.1 Measures to ensure that the OTS has sufficient resources and funding, not only to undertake the projects it is instructed to undertake by the Chancellor of the Exchequer, but also those which it wishes to undertake on a proactive basis.

4.2 That the OTS should not only be required to report annually on its own performance, but that it should also report upon the complexity of the tax system and increases or decreases in complexity year-on-year; helping identify a ‘direction of travel’ in the tax system.

4.3 That the OTS should scrutinise proposed legislation that it identifies for review. Historically the vast majority of the OTS’ work has been on legislation already on the statute books, and so publishing commentary on proposed legislation, from a complexity perspective, will highlight the importance of minimising complexity in new legislation.

4.4 We also recommend that the senior personnel at the OTS, in particular the Chair and Tax Director, are adequately remunerated for the time they spend in undertaking their non-Board-duties; as opposed to the relatively nominal sums which are paid at present.

5. On 12 May 2016, the OTS published a strategy consultation document [2] setting out, and seeking views on, how it thinks the OTS should develop and operate as it embarks on this new chapter as a statutory body. The CIOT looks forward to continuing its engagement with the OTS as it develops, and implements, its strategy.

Appendix: The Chartered Institute of Taxation

The Chartered Institute of Taxation (CIOT) is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.

The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.

The CIOT’s 17,600 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.

July 2016


[1] We acknowledge that the length of legislation is not a direct indication of complexity, but it is an indication of change which of itself brings complexity.

[2] See https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/522884/20160512_ots_strategy_stakeholder_consultation_document.pdf

 

Prepared 4th July 2016